Pentair plc (PNR) has reported 22.40 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $141 million, or $0.77 a share in the quarter, compared with $115.20 million, or $0.63 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $142.70 million, or $0.78 a share compared with $127.10 million or $0.70 a share, a year ago.

Revenue during the quarter grew 8.80 percent to $1,210.70 million from $1,112.80 million in the previous year period. Gross margin for the quarter expanded 95 basis points over the previous year period to 36.42 percent. Total expenses were 84.90 percent of quarterly revenues, down from 86.26 percent for the same period last year. This has led to an improvement of 136 basis points in operating margin to 15.10 percent.

Operating income for the quarter was $182.80 million, compared with $152.90 million in the previous year period.

"We delivered third quarter earnings in line with our expectations on the back of strong cost and cash flow execution," said Randall J. Hogan, Pentair chairman and chief executive officer. "We are updating our fourth quarter guidance to reflect the ongoing sluggish industrial environment, and we no longer expect to see the typical end of year push on capital spending. We do not believe it is prudent to enter our planning cycle for next year expecting any dramatic recovery in growth and therefore we are aggressively aligning our cost structure with the reality of a continued slow growth world. We remain on track for the sale of our Valves & Controls business to be completed at the end of this year or early next year, at which point we expect to have a dramatically stronger balance sheet and be positioned to allocate resources in a disciplined manner."

For the fourth-quarter, Pentair expects revenue to be $1,220 million. The company projects diluted earnings per share to be $0.63. On an adjusted basis, the company expects diluted earnings per share to be $0.73.

For fiscal year 2016, Pentair expects revenue to be $4,920 million. The company projects diluted earnings per share to be $2.50. The company expects diluted earnings per share to be $3.00 on adjusted basis. 

The company has spent $78.50 million cash to meet investing activities during the nine month period as against cash outgo of $1,930.60 million in the last year period. It has incurred net capital expenditure of $70.40 million on net basis during the nine month period, up 12.28 percent or $7.70 million from year ago period.

The company has spent $444.50 million cash to carry out financing activities during the nine month period as against cash inflow of $1,612.50 million in the last year period.

Cash and cash equivalents stood at $170.90 million as on Sep. 30, 2016, up 17.94 percent or $26 million from $144.90 million on Sep. 26, 2015.
 

Working capital remains almost stable
Pentair plc has witnessed a decline in the working capital over the last year. It stood at $1,458.90 million as at Sep. 30, 2016, down 0.62 percent or $9.10 million from $1,468 million on Sep. 26, 2015. Current ratio was at 2.13 as on Sep. 30, 2016, up from 1.98 on Sep. 26, 2015.

Cash conversion cycle (CCC) has decreased to 52 days for the quarter from 186 days for the last year period. Days sales outstanding went down to 71 days for the quarter compared with 94 days for the same period last year.

Days inventory outstanding has decreased to 33 days for the quarter compared with 158 days for the previous year period. At the same time, days payable outstanding went down to 52 days for the quarter from 67 for the same period last year.